Vidant funding resolution in the works

North Carolina State Legislative Building

RALEIGH — A dispute involving the legislature’s $35 million in funding cuts to Vidant healthcare may be close to a resolution as the budget for fiscal years 2019-20 and 2020-21 is being finalized.

The office of Rep. Greg Murphy (R-Pitt) confirmed a report that a budget agreement is being hammered out which would restore Vidant’s funding and Medicaid reimbursements and the UNC Board of Governors’ retains the ability to appoint 45% of the members of the hospital’s board of trustees as part of a new provision for $15 million for construction of a new medical school.

These funds for the new school facility would start in 2020-21 and funds thereafter would be conditional based on “existence of and compliance with an affiliation agreement” between UNC or East Carolina University and the “primary affiliated teaching hospital for the Brody School of Medicine.”

The Vidant funding cuts will take effect on July 1 unless legislators, UNC and Vidant can reach an agreement.

Earlier this month, a letter sent by House Speaker Tim Moore (R-King’s Mountain) and Majority Leader Rep. John Bell (R-Wayne) to Rep. Kandie Smith (D-Pitt) said in part that “we are close to securing an agreement to restore funding for Vidant’s teaching hospital at ECU, and provide additional funds requested by the Brody School of Medicine.”

“First and foremost, I am incredibly pleased to hear that the concerns of those who live in Eastern North Carolina have been made a priority as the budget conference committee negotiates the final budget,” Rep. Smith said in response to the letter.

The issue of Vidant’s funding cut goes back to a lawsuit filed by the UNC System that accuses Vidant and Pitt County of a breach of contract by stripping the UNC System of appointees to the Vidant board. The same day the complaint was filed the General Assembly voted to cut $35 million in funds to Vidant.

The funding and board member arrangement between Vidant and the UNC Board of Governors goes back to 1975. The most recently updated contract between UNC and Vidant calls for a 20-member board of trustees of which 11 are appointed by Pitt County commissioners and the UNC Board of Governors appoints 9.

According to the UNC complaint filed on May 10 in Wake County, Pitt County Commissioners ran afoul of the agreement between the two entities when they voted on April 22nd to remove all 9 seats allotted to the UNC Board of Governors and give them to Vidant.

UNC and Vidant entered into mediation five days after Superior Court Judge Allen Baddour granted UNC a 10-day, temporary restraining order against Vidant Health on May 24.

By the first week of June, Vidant issued a statement which included a proposed settlement agreement which would grant Pitt County 11 seats, Vidant two seats and the four remaining seats would go to the UNC Board of Governors. The dean of the Brody School of Medicine would be the final board member.

After Vidant shared their proposal, East Carolina University Interim Chancellor Dan Gerlach and Dr. Mark Stacy, dean of the Brody School of Medicine and vice chancellor for health sciences issued a letter further condemning Vidant and the Pitt County Commissioners actions.

“The plain fact is that Vidant Health and Pitt County acted behind closed doors to change how appointments are made to the Vidant Medical Center Board. No one at ECU/Brody was consulted or agreed to this change,” the letter to the ECU community reads.

“This action violated the affiliation agreement that ECU and Brody have with Vidant and Pitt County. Their action broke an agreement that has been in place, in some form, for decades. We at ECU made the decision to protect our interests and engaged legal counsel to defend the agreement.”

The co-written letter continues, stating that “Vidant and Brody are NOT the same entity. Vidant is an independent corporation with its own goals and motives,” and that they hope that mediation will be successful.

About A.P. Dillon 62 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_